25 August 2016

Shortly after this year’s Federal budget it
dawned on me that the Government’s proposal to scrap the energy supplement for
new claimants of certain transfer payments (eg, Newstart allowance) would
actually make them worse off than if the supplement had never been introduced
in the first place. To draw attention to this issue, on 4 May I started what
has been an ongoing series of posts about it on Twitter, along with a more
detailed blog post on 14 May.

Since then I’ve been writing to MPs, Senators,
Ministers and their parties about it, as well as journalists in the major media
outlets, mainly via Twitter. I’ve also chatted (in the good old fashioned
verbal way!) with a few people about it over the intervening months.

These efforts have shown me that it can
actually be a bit difficult for some people to get their head around how it’s
possible to remove a no-longer-needed extra bit from a payment and in doing so have
people end up with less than the original, pre-extra bit, amount. So here’s
another go at explaining it; one that doesn’t use pictures or tables or
discussions about the CPI. It’s a vast simplification compared to what is
actually going on, but the essential mechanism is there…